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Florida’s Million Dollar Homes Up

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The number of million dollar homes (and higher) is climbing in several cities due to several factors, including stong appreciation rates, the desire for larger dwellings and better construction quality, according to research from Harvard University’s Joint Center for Housing Studies.

Florida is home to about 5.8% of these $1 million-plus residential properties, followed by 4.4% in Connecticut, 4% in Illinois, 3.8% in New Jersey, and 3.2% in Texas and Massachusetts. Leading the nation, not surprisingly, are California and New York, with 40% and 7.1% respectively.

According to a Federal Reserve report, whites own a disproportionately higher percentage of these luxury homes than minorities.

~Dan Hoffman

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About Mr. Homes & Loans

  • http://www.tude.com/ Hal Pawluk

    What mystifies me is how as home prices are climbing (ours has doubled in three years) so are foreclosures. Apparently it’s getting to be a serious problem aross the country.

    First-time buyers see dreams fade Indianapolis 1/28/04

    As volume of foreclosures swells, some want moratorium Philadelphia 2/9/04

    Foreclosures among first-time buyers alarming Tucson 2/10/04

    Any thoughts on why this is happening?

  • http://www.homeintampabay.com John Mudd

    Hal, I can’t give you an exact answer, but I have read where predatory lending has caused quite a few foreclosures. The last I read there was a bill in the U.S. House to put a stop to predatory lending, although I’m not sure of its current status.

    I don’t think home prices have anything to do with foreclosures. I think the primary causes right now are lenders lending to people who really can’t afford to repay the loan and high unemployment. People don’t always want to sell their home, even though they really need to, financially. Of course, divorce and other miscellaneous reasons can create a foreclosure situation.

    Also, mortgage money is more easily available now than it was during past times, and more people are taking out loans because of low rates. Naturally, the more loans taken out, the higher the number of foreclosures will be.

    Hope that helps.

    Cheers.

    -John Mudd
    “Mr. Real Estate”

  • http://www.tude.com/ Hal Pawluk

    “Naturally, the more loans taken out, the higher the number of foreclosures will be.?

    It’s not just higher numbers, but the percentage of loans going into foreclosure. The national foreclosure rate is 1.15% which is, according to an individual in one of those articles, “the worst time for foreclosures basically since the Great Depression.”

    The House bill might be worth supporting.

  • http://www.homeintampabay.com John Mudd

    That is a pretty high number. I would definitely agree with you on supporting that bill. Predatory lending is not a good practice at all. I hope the bill does pass, if it hasn’t already.

    Cheers.

    -John Mudd
    “Mr. Real Estate”

  • http://www.tude.com/ Hal Pawluk

    Another likely factor is this “growing economy” with millions of jobs exported, and the few that are coming back paying 21% less on average nationally, 40% less here in California.

  • http://www.ezhomefree.com Dan Hoffman

    As part of my business, I work with people to save them from foreclosure, though refinancing if they have enough credit, or by directly purchasing their house if they do not, so I get to see a lot of these situations up close & personal. From what I see, people’s attitudes are as much at fault as anything else. They see their house as a source for inexpensive financial leverage instead of an assett worth paying off.

    Last summer/fall interest rates hit a 40 year low, which drove the greatest refinancing boom in history. People had an opportunity to lower their house payments and build up equity faster than ever, so what did many do? They refinanced and pulled the equity out of their house in cash! So someone owns a $200K house, owes $150K, and refinances for $185K, taking the extra $35,000 for new cars, vacations, whatever. Now they lose their job or have a tough year in their business, and miss a few payments. Foreclosure action is started, and the next thing they know, they owe $22,000 in legal fees, late fees, and back interest on top of the $185K they thought they owed, for a total of $207,000. Now what? If they sell at market value for $200K, then they have to pay $7,000 plus closing costs to get out of the house. If their credit is shot so they can’t refi, and they don’t have enough cash to sell, then they walk away & foreclose. There are better options available, but most people aren’t aware that they exist.

    To avoid foreclosure, people have to sell sooner in the process, before the fees rack up that high, or maintain more equity in their house “just in case.” Legislation might help, but I think educating consumers would be more effective.

  • Travis

    I was a mortgage broker in Florida for about 3 years. Got in and out at just about the right time (from a broker’s perspective). Couldn’t agree with the above comment more. People were looking at their homes as their own private lending institution. I don’t get a good feeling when I think of many of the loans I did and the situations those people must be in now.

    – Travis